News

Trading has been slow with traders awaiting the USDA quarterly stocks report. The report was generally perceived as a little negative for wheat as US ending stocks have been estimated 2 mln mt higher than the average trade estimate. This and missing out on the Egyptian tender saw new contract lows trade on the CBOT wheat futures market. Good yields and reasonable quality of the Canadian wheat crop has also been putting pressure on the Minneapolis and Kansas futures (the MGE & KBT are both milling wheat contracts). Harvest in Canada is now 80% complete and the weather remains benign. Egypt has bought Russian supplies once again, although at this tender US supplies where only a couple of bucks away from the business on a FOB basis but after freight is considered it is circa $10 more. French offers however were uncompetitive but values on mainland Europe are holding up well and are significantly above intervention parity. Part of the reasoning behind this is the continuing pace of EU exports which remains close to last year�€�s record. Outlook: There are ample amounts of wheat stock available in the world. However there needs to be a change in ownership. There are tenders for shipment to Turkey, Bangladesh, Iraq in the offing and the black sea suppliers seem to be under less pressure.

Wheat

Grain values stabilise
Trading slow
Milling premiums hold

Grain values have seen one of the flattest periods for many months, in fact if calculated in Euro terms there is little or no change in farm gate prices. Last week did see a reasonable change in ownership as producers took advantage of the rise and traders reduced their short positions. This week has seen a little more export activity than of late, with buyers from the near continent buying autumn and spring shipment cargoes. The availability of Baltic supplies seems to be slowing and there have been some comments about the lower proteins on some of the cargoes shipped from Denmark in particular. Milling markets have seen a little more activity and full spec group 1 premiums have been trading at around £23 over feed at the point of delivery with group 2`s on the same basis trading at £13 over. Lower protein milling varieties are now trading at £2 to £3 over feed at the point of delivery meaning in some regions they are trading at feed levels. Outlook: The UK has a surplus of wheat to sell. Much of this is low grade milling wheat & sterling has helped bridge the gap to export parity, but the job is not yet fully done. While EU value look expensive in world terms.

Oilseed Rape

Market has gained €2 this week with the domestic market advancing £2 in the same period. Domestic market had a slow start to the week with the market drifting lower ahead of the widely watched for USDA stock report issued on Wednesday. The report proved to be initially bearish for beans and our own market initially but this was reversed with rising crude oil prices, 6% on Wednesday, helped by a weaker USD$ and lower than expected gasoline inventories report. STG has remained at the €/£ 0.91 trading to €/£0.9250 at one point adding some support to domestic prices. External influence so far this week has really been the USDA stock report. The market has been anticipating the report all week and hence market participants were reluctant to build positions either side and hence the market weakened. The report shows an increase of 27Mn bushels above industry estimates of 110Mn bushels and the initial reaction was bearish for both markets. The sentiment was soon reversed when focus was switched to Crude oil which had made strong gains and the wet weather that was hampering harvest efforts, both bits of news helping soybean markets better. Latest weather reports also show that wet weather is likely to remain in the mid west US along with some incidence of frost seen in the longer range forecast. Other news stories have seen Deutsche bank announce that it will be re weighting its commodity index tracker funds, halving its grain and oilseed exposures and reducing crude oil exposure by some 20%. With funds having assets measured in the billions of dollars any move can impact the market place. Latterly the market is watching news from indo-pacific region following the earthquakes that have rocked the region. The implication being that there could be issues with exports of Palm oil from the region. We are awaiting the statscan report covering the Canadian canola crop production figures with estimates of a 1Mn tonne increase on the 9.54Mn tonnes reported last month. No Bank of England meeting this week no change forecast for the next meeting although details of the quantitative easing programme will be watched for as an International monetary fund report issued Wednesday suggests the UK remains in a precarious economic position.

Seed

With parts of England resembling a dustbowl, drilling has slowed and in some areas stopped, while growers wait for this weekends promised rain. There is a belief that more winter cropping will go in once soil moisture returns, there is even talk of some OSR crops having to be replaced in the east.

Trade estimates of the types of wheat sown show group 4 feed types making up 65% of what has been sown so far, ( although Openfield sales show 45% feed 65% market orientated varieties ). When considering what to plant next , varieties with defined end markets are worth considering to avoid too high a percentage ( of what may be a very large wheat crop ) having to go into the feed market.

Openfield still have contracts available for Solstice and Hereward group 1`s Cordiale group 2, Claire and Scout group 3 plus the late sown wheat`s Paragon and Zircon which should the weather close in, can be sown as spring wheat.

Winter beans Sultan and Wizard will be processed next week and for the forward thinkers Spring Linseed and Human Consumption pea contracts are available.

Speak to your Openfield business manager or UAP agronomist to register an interest.

Fertiliser

There is an increasing recognition for the need to replace P & K, especially after the very good yields over the past two harvests. However with the still relatively high Potash price and the current grain market conditions it is understandable to put it off for another day. One solution is to look at NPK in the Spring. We shall be launching the GrowHow Granular Compound campaign in early October. This may not solve a deficiency problem, but is the ideal way to cover any top-up N requirements while taking a maintenance approach to P & K. Granular Compounds ensure an even application of all nutrients across the bout width. Please speak to your Farm Business Manager for the full range of GrowHow true Granular compounds.

Pulses

Beans, market has received another boost this week gaining a healthy £2-£3 with farmers remaining reluctant sellers along with the return of export interest. As forecast last week, weaker STG has enabled the UK to remain competitive against European offerings. Wizards are now trading £5 over feed while Springs are commanding a £10 premium. Peas, good quality blues remain supported however bleached examples are proving difficult to find homes for. Second tier samples, approx. 10% bleached, are seeing bids between £160 - £165 into dependant on location, into micronizing homes. Growers with quality samples of blue or marrowfat peas are encouraged to contact your Openfield buyer.

Oats

Market remains at an impasse. Millers and growers remain at odds over the value of the product with trade being conducted but at levels which most growers would see below fair value. European export business is still being done ex Baltic region, but as reported last week this is at levels equivalent to £50-£55 ex farm. Until the stock overhang is cleared we do not see any short term gains in the market.

Disclaimer

While the information contained herein is believed to be reliable, Openfield makes no representation as to its accuracy or completeness. Any statement non-factual in nature constitutes current opinion, which are subject to change.